Economists are a bit more optimistic about growth in the gross domestic product (GDP) and stability in prices, compared to their outlook last October.
But GDP growth won’t likely be sufficient to substantially lift the labor market.
About two-thirds of economists see real GDP growth top 2 percent between the fourth quarter of 2011 and fourth quarter of 2012, according to the latest survey this month by the National Association for Business Economics.
In October, the survey found that 16 percent of respondents expected a 2 percent annual growth.
Now, only 28 percent see GDP expanding between 1.1 percent and 2 percent, down significantly from 70 percent in October.
But it generally takes GDP growth of 3 percent or higher to revive a job market as weak as the current one. Unemployment is at 8.5 percent, the lowest in three years, but persistently high enough to weigh down economic growth.
More than two-thirds of NABE industry panelists surveyed in January reported that wages and salaries have remained unchanged. That share of 78 percent is the highest share in recent surveys and almost all respondents expect either no change in prices or minor price increases of 5 percent or less by their companies.
Materials costs rose for 31 percent of respondents and were unchanged for 59 percent of them, which indicates a continued trend toward greater stability in materials prices.
However, sales continued to weaken for respondents in the January 2012 survey.
Two out of five (about 41 percent) of NABE panelists reported unchanged sales and a similar share reported rising sales. Nonetheless, 19 percent reported falling sales, which is the highest share in that category in recent quarters.
Between 40 percent and 50 percent of respondents in the goods producing, services, and the transportation, utilities, information, and communications sectors, reported rising sales – while between 25 percent and 32 percent of respondents in those same sectors reported falling sales
Almost two-thirds (65 percent) of NABE panelists from the finance, insurance, and real estate sector, reported unchanged sales and no respondents reported falling sales.
